Changjiang Securities·2025-03-30 23:31Investment Rating - The report maintains a "Positive" investment rating for the military industry [2] Core Insights - The military industry is expected to benefit from significant demand driven by geopolitical factors and domestic advancements in self-developed equipment [57][60] - The report highlights the importance of raw materials and components in the military sector, indicating that these segments have outperformed the overall military industry in recent years [12][16] - The emergence of deep-sea technology as a new industry is emphasized, with government support expected to accelerate development in this area [26][29] Summary by Sections Section 1: Raw Materials and Components - The report notes that the raw materials and components segment has shown significant excess returns, with cumulative returns reaching 187% and 272% respectively since early 2020, outperforming the military defense index [12][14] - The uptrend in the raw materials and components sector is expected to signal robust demand for the military industry in the upcoming five-year plan [16][18] Section 2: Deep-Sea Technology - The 2025 government work report has officially recognized deep-sea technology as an emerging industry, indicating a shift in focus and potential for growth [26][30] - The development of deep-sea technology is crucial for resource exploitation and ensuring national security in maritime domains [29][34] Section 3: Geopolitical Influence on Military Trade - The report discusses the correlation between global military trade orders and geopolitical tensions, noting a significant increase in military trade orders from 207.79 billion TIV in 2020 to 444.16 billion TIV in 2023, with a compound annual growth rate of 28.82% [60][62] - The report highlights that the U.S. has seen a notable increase in military export orders, while Russia's share has declined significantly [70][72] Section 4: Export Potential of Chinese Military Equipment - Chinese self-developed military aviation equipment has achieved stable export levels, with more advanced models poised for future export opportunities [77][78] - The report lists various military aircraft and drone models that have been successfully exported, indicating a strong pipeline for future sales [79][81]